Stocks Lower into Final Hour on Escalating Mideast War Tensions, Mideast War-Induced Inflation Fears, Rising Long-Term Rates, Consumer Discretionary/Transport Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.5 +.2%
• BofA Private Credit Proxy Index 72.1 -.4% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .31 +1.0 basis point
• BofA Global Financial Stress Indicator -.13 +2.0 basis points
• European Financial Sector CDS Index 54.7 +1.7%
• Emerging Market CDS Index 137.7 +.4%
• Israel Sovereign CDS 53.1 +1.7%
• Bloomberg Global Trade Policy Uncertainty Index 1.0 +.4
• US Morning Consult Daily Consume Sentiment Index 89.5 +2.8

• Citi US Economic Surprise Index 25.6 -.4

• Citi Eurozone Economic Surprise Index 76.1 -3.1

• Citi Emerging Markets Economic Surprise Index 19.2 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +53.2% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 400.26 +.70:  Growth Rate +22.0% +.3 percentage point, P/E 19.1 -.2
• S&P 500 Current Year Estimated Profit Margin 16.31% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +131.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 976.02 +1.42: Growth Rate +45.4% +.3 percentage point, P/E 19.0 -.1
• Bloomberg US Financial Conditions Index 1.23 -1.0 basis point
• US Yield Curve 40.75 basis points (2s/10s) +.5 basis point
• Bloomberg Industrial Metal Index 185.4 +.7%
• Dutch TTF Nat Gas(European benchmark) 79.1 euros/megawatt-hour +4.3%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.2 -.1 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.7% unch.
• US 10-Year T-Note Yield 4.84% +5.0 basis points
• 1-Year TIPS Spread 2.45 +2.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 54.3% (-.1 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 39.6%(-1.3 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -970 open in Japan 
• China A50 Futures: Indicating -85 open in China
• KOSPI 200 Futures: Indicating -1 open in South Korea 

• DAX Futures: Indicating -10 open in Germany

Portfolio:

• Higher: On gains in my tech/energy sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to 50% net long

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.4%

Sector Underperformers:

• 1) Space -2.3% 2) Alt Energy -2.1% 3) Construction -2.0%

Stocks Falling on Unusual Volume: 

• PCG, PAX, IRT, XP, KMB, DYN, BKNG, AVAV, CNM, INGM, TH, LIFE, KSPI, SFD, PINS, BKV, BNED, ORA, CHWY, XE, CASY, EVMN, TYRA, 

Stocks With Unusual Put Option Activity:

• 1) QQQM 2) CMCSA 3) IBRX 4) CHWY 5) AEO

Stocks With Most Negative News Mentions:

• 1) NNOX 2) CASY 3) TYRA 4) TBBK 5) CMCSA

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) GDX 3) IGV 4) XLE 5) XLK

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.3%

Sector Outperformers:

• 1) Computer Services +1.9% 2) Gold & Silver +1.9% 3) Energy +1.2%

Stocks Rising on Unusual Volume:

• ODD, SIG, PLSE, SWMR, ASO, FTK, NET, SSL, CMPS, AEHR, JMKE, SUNB, SEI, META, SRPT, AKAM, PURR, GME, HCA, CHYM, AMBA, TNGX, AVO, PAAS, EQNR, CAL, EIKN, INBX, GOLD, FICO, SYY, PSLV, HMY, URGN and VG

Stocks With Unusual Call Option Activity:

• 1) SUNB 2) TTAN 3) VNET 4) GRAB 5) LYV 

Stocks With Most Positive News Mentions:

• 1) SIG 2) ODD 3) INNV 4) FTK 5) SUNB

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLP 3) ALAI 4) XLC 5) IYW

Charts: 

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (LOVE)/-.36
• (M)/.37
• (SHOE)/.34 

After the Close: 

• (ADBE)/6.08
• (CPRT)/.38
• (DSGX)/.55
• (ORCL)/1.74
• (RH)/.38
• (ZUMZ)/-.14 

Economic Releases 

8:30 am EST

• Initial Jobless Claims for last week is estimated to fall to 205K versus 206K the prior week.
• Continuing Claims is estimated to rise to 1780K versus 1779K prior.
• PPI Final Demand MoM for Aug. is estimated to rise +.4% versus unch. in July.
• PPI Ex Food and Energy MoM for Aug. is estimated to rise +.3% versus a +.2% gain in July. 

10:00 am EST

• Existing Home Sales for Aug. is estimated to fall to 3.98M versus 4.06M in July.
• Wholesale Trade Sales MoM for July. 

12:00 pm EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,286,200 barrels versus a -4,450,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,053,000 barrels versus a -1,173,000 barrel decline the prior week. Distillate inventories are estimated to fall by -418,200 barrels versus a +796,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -1.0% versus a +.6% gain prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 30Y T-Bond auction, Atlanta Fed GDPNow Q3 update, ECB meeting, OPEC onthly report, weekly EIA natural gas inventory report, Fed's weekly balance sheet report, Goldman Sachs Communacopia Conference, Jefferies Industrial Conference, Wells Fargo Healthcare Conference, Wolfe Research TMT Conference, Citi Tech/Media/Telecom Conference, Jefferies Renewables/Clean Energy/Construction Conference, (LH) investor day and the UBS Materials Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -10.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.9 -.1
• 1 Sector Rising, 10 Sectors Declining
• 25.4% of Issues Advancing, 72.4% Declining 
• TRIN/Arms .78 -23.5%
• Non-Block Money Flow -$236.4M
  
• 35 New 52-Week Highs, 181 New Lows
• 53.7% (-4.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.8 -6.7

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 7.0% unch.
• Strait of Hormuz traffic returns to normal by September 30th 2.0% unch.
• Iran agrees to end enrichment of uranium by Sept. 30th 3.0% +1.0 percentage point
• Israel withdraws from Lebanon by September 30th 1.0% unch.
• US Invades Iran before 2027 15.0% unch.
• US announces end of Iranian blockade by September 30th 15.0% unch.

Other

• Bloomberg Global Risk-On/Risk-Off Index 129.8 +.2%
• Global Monitor Iran Instability Index 70.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 445.25 -4.75 basis points
• Bloomberg Cyclicals/Defensives Index 270.5 +.5%
• Morgan Stanley Growth vs Value Index 148.5 +.5%
• CNN Fear & Greed Index 40.0 (FEAR) -2.0
• 1-Day Vix 9.5 -9.4%
• Vix 16.3% +3.8%
• Total Put/Call .79 -3.7%

Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 65.075 -.25 basis point. 
• China Sovereign CDS 35.0 +.25 basis point.
• China Iron Ore Spot 100.4 USD/Metric Tonne -.7%. 
• Crude Oil 9.62/bbl. +1.7% 
• Gold 4,390.20 USD/t oz. -1.1%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.29 -.05%.
• Bloomberg Emerging Markets Currency Index 34.29 unch.
• Bloomberg Global Risk-On/Risk Off Index 130.0 +.4%.
• US 10-Year Yield 4.79% +1.0 basis point.
• Japan 30-Year Yield 3.98% +1.0 basis point.
• Volatility Index(VIX) futures 18.5 +.5%.
• Euro Stoxx 50 futures -.48%. 
• S&P 500 futures -.03%.
• NASDAQ 100 futures -.01%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Escalating Mideast War Tensions, Mideast War-Induced Inflation Fears, Technical Selling, Pharma/Consumer Discretionary Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.0 +.4%
• BofA Private Credit Proxy Index 72.4 -1.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .30 -1.0 basis point
• BofA Global Financial Stress Indicator -.15 -2.0 basis points
• European Financial Sector CDS Index 53.8 +.4%
• Emerging Market CDS Index 136.5 -.3%
• Israel Sovereign CDS 52.2 -.3%
• Bloomberg Global Trade Policy Uncertainty Index .6 -.1
• US Morning Consult Daily Consume Sentiment Index 86.7 -3.3

• Citi US Economic Surprise Index 26.0 +.1

• Citi Eurozone Economic Surprise Index 79.3 -.9

• Citi Emerging Markets Economic Surprise Index 19.2 -1.4
• S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +53.2% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 399.56 +1.78:  Growth Rate +21.7% +.5 percentage point, P/E 19.3 -.2
• S&P 500 Current Year Estimated Profit Margin 16.29% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +131.6% +.1 percentage point
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 974.60 +3.20: Growth Rate +45.1% +.4 percentage point, P/E 19.1 -.4
• Bloomberg US Financial Conditions Index 1.24 -1.0 basis point
• US Yield Curve 40.25 basis points (2s/10s) -2.5 basis points
• Bloomberg Industrial Metal Index 184.1 +1.6%
• Dutch TTF Nat Gas(European benchmark) 77.3 euros/megawatt-hour +5.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.3 -.7 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.7% unch.
• US 10-Year T-Note Yield 4.80% +1.0 basis point
• 1-Year TIPS Spread 2.42 +7.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 54.9% (+.5 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 41.0%(-.4 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -45 open in Japan 
• China A50 Futures: Indicating -58 open in China
• KOSPI 200 Futures: Indicating +13 open in South Korea 

• DAX Futures: Indicating -66 open in Germany

Portfolio:

• Higher: On gains in my tech/energy sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 75% net long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.5%

Sector Underperformers:

• 1) Medical Equipment -3.2% 2) Pharma -2.7% 3) Retail -2.1%

Stocks Falling on Unusual Volume: 

• SHIP, IONS, SNN, SBLK, ALMS, SHEN, INBX, RPRX, LNG, STZ, BRZE, WAFD, PLSE, EXPE, BIDU, SYK, HWM, AMGN, BEAM, GPCR, NVS, DYN and SGML

Stocks With Unusual Put Option Activity:

• 1) GT 2) XLV 3) XRT 4) BILI 5) NVS

Stocks With Most Negative News Mentions:

• 1) AMGN 2) CAN 3) GDDY 4) SYK 5) WAFD

Sector ETFs With Most Negative Money Flow:

• 1) DRAM 2) XLY 3) IGV 4) KRE 5) XLB

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.4%

Sector Outperformers:

• 1) Lithography/Photonics +4.6% 2) Nuclear +4.6% 3) Space +3.8%

Stocks Rising on Unusual Volume:

• GMTL, FCEL, ROIV, SEI, SMR, AXTI, CRWV, LITE, EROC, BE, MLYS, SMTC, LPTH, ERO, ALM, REAX, NNE, INTC, RVI, IOND, INFQ, NBIS, COHR, CIFR, AAOI, CHA, BRUN, ABM, ENOV, IREN, NOK, BILI, PHVS, CLS, BRVE, HUT, XE, EVMN, OKLO, QBTS, MARA, AEHR, LIFE, INIO, SHAZ, PGNY, AMBA, HRI, ZIM, TECK, EIX, TH, QVCG, ABVX, PAYP, FRVO, GRDN, QCOM, PBR, ATRC, GPRK, BG, NEXA, PCG, XYL, SSMR, TKO, ARQT, AVAV, TSLA, TRLV and VIST

Stocks With Unusual Call Option Activity:

• 1) IAG 2) REI 3) ANGX 4) XME 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) SEI 2) BE 3) LITE 4) ROIV 5) BNC

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) PAVE 3) XLF 4) MAGS 5) IYF

Charts: 

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (ASO)/2.07
• (CHWY)/.18
• (JMKE)/.22
• (KFY)/1.36
• (SIG)/1.74 

After the Close: 

• (AVAV)/.22
• (AEO)/.22
• (COO)/1.12 

Economic Releases 

• None of note 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 10Y T-Note auction, weekly ADP employment change, weekly US retail sales reports, Thomson Reuters IPSOS PCSI for Sept., weekly MBA Mortgage Applications report, API weekly crude oil stock report, Deutsche Bank Tech Conference, Goldman Sachs Communacopia Conference, JPMorgan Rising Tech Leaders Forum, Citibank TMT Conference, StoneX TMT Forum, B. Riley Consumer/TMT Conference, Barclays Consumer Staples Conference, (NTAP) annual meeting and the Jefferies Industrial Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -8.3% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.0 +.5
• 3 Sectors Rising, 8 Sectors Declining
• 40.0% of Issues Advancing, 57.6% Declining 
• TRIN/Arms .80 -39.4%
• Non-Block Money Flow -$203.9M
  
• 44 New 52-Week Highs, 70 New Lows
• 56.4% (-2.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.5 -5.0

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 7.0% -2.0 percentage points
• Strait of Hormuz traffic returns to normal by September 30th 2.0% -1.0 percentage point
• Iran agrees to end enrichment of uranium by Sept. 30th 2.0% -1.0 percentage point
• Israel withdraws from Lebanon by September 30th 1.0% unch.
• US Invades Iran before 2027 15.0% unch.
• US announces end of Iranian blockade by September 30th 15.0% -3.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 129.6 -.8%
• Global Monitor Iran Instability Index 70.0 -2.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 451.75 +19.0 basis points
• Bloomberg Cyclicals/Defensives Index 269.3 -.7%
• Morgan Stanley Growth vs Value Index 148.3 +.6%
• CNN Fear & Greed Index 42.0 (FEAR) +1.0
• 1-Day Vix 7.9 -34.4%
• Vix 15.3% -.2%
• Total Put/Call .81 +9.5%

Tuesday Watch

Around X:

• @Business   

• UK Prime Minister Andy Burnham’s government is expected to ban trade with Israeli settlements in the West Bank on Tuesday as he seeks to adopt a stronger policy on an issue that’s important to his governing Labour Party. 
• Flávio Bolsonaro pulled even with President Luiz Inácio Lula da Silva in a new poll as the right-wing senator seizes on turmoil at Brazil’s Supreme Court to rally conservative voters. 
• Japan’s $7.5 trillion bond market has, for decades, been considered one of the world's most stable. But recently the 10-year yield hit 3% for the first time this century. Here’s what’s driving the surge, in six charts. 
• An AI-developed drug has succeeded in reducing the biological age of some patients by up to six years. The results are preliminary, but they open a new avenue in the search for treatments against aging. 
• Millennium has more than doubled its assets in six years to $97 billion, vaulting past hedge fund rivals. Izzy Englander has a plan to make it even bigger. 
• Here’s the latest news and analysis on the oil market. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day. 

• @Zerohedge 

• UBS Calls Brazil Election "Extremely Close" - Bolsonaro Win Would Cement LatAm's Political Shift. 
• Chinese Oil Demand Unexpectedly Soars, Sending Shanghai Crude Above $100, With Brent Prices Set To Follow. 
• Chinese new bank loans contracted by a record CNY341 billion in July, sending Chinese credit impulse to post-Lehman low. No wonder Beijing just launched the biggest "recap" of its banks this century. 
• Canada's Tariff Strategy Designed To Interfere With U.S. Midterm Elections. 
• "Largest Recapitalization In Decades": China Injects Massive $56 Billion In Banks To Offset Collapse In New Credit Formation. (graph)
• Welcome To The World That Now Exists.
• Six Nuclear Bills Clear House Committee Without A Single 'No' Vote.
• DOJ Announces Deal With Mount Sinai Ending Pediatric Sex-Change Interventions.
• Key Events This Holiday-Shortened Week: All Eyes On Friday's CPI.
• Astra Is Not Heralding 'The AGI Era', Here's Why...     
• Japan Sold Almost $90 Billion In Treasuries To Fund Record Yen Intervention.
• Iran To Draw New "Restricted Zone" In Hormuz As Saudi Aramco Facility Hit Again, Oil Climbs.
• The Copper Chart Causing Alarm.
• This Labor Day, A Look At Declining Role Of Unions In America.
• *COPPER SURGES TO ALL-TIME HIGH ABOVE $14,530 A TON ON LME.
• Zelensky Expects War To Continue Through Winter, As Witkoff-Kushner Deliver 'Upbeat Assessment' From Putin Meeting.
• GOP Bets On Trumpapalooza To Defy Midterm History.
• Another day, another record for Korean stock buybacks to offset massive retail outflows.
• From AfD To Astra: Goldman Delta-One Boss Says 'Micro Is Fine, Macro's Getting Harder'.
• Top Overnight News. Saudi Aramco’s oil facilities in the Saudi Arabian city of Jizan have been attacked only a month after a separate strike temporarily knocked out some production at its refinery.: FT. Iran says US energy companies' facilities are 'exposed': RTRS. UAE says its energy exports will not be 'held hostage' by Iran war: RTRS...
• Central Banks Bought 23 Tonnes Of Gold In July.
• AfD's Historic Win Shocks German Political Establishment: Here's What Happens Next.
• Oh Look, Yet Another Church Up In Flames....
• Labor Day Gas Prices Have Never Been Higher.
• 153 Million US And Canadian Driver’s Licenses Are Being Sold On A Russian Cybercrime Forum.
• Freedom Is Much More Important Than Democracy.
• Dr. Robert Malone On Well-Being & 'Mental Illness' In Women.
• Iran Threatens South Korean Assets If Seoul Joins Hormuz Mission.
• Nick Shirley Sues California Over 'Stop Nick Shirley Act'.
• Morgan Stanley Lays Out The Value Of Fed Ambiguity: The Four Uncertainties Facing Makets.     
• Amid Washed Out Positioning, Goldman's Flows Guru Spots An Opportunity Into Catalyst-Heavy Week.              .

• @CNBC 

• Dow futures fall 300 points to start shortened week as oil prices climb: Live updates.       
• Trump says Bombardier can't sell in U.S. unless Canada aerospace giant builds there.
• Federal investigators probe Amazon cargo jet's fiery runway crash that killed 5 in Miami.
• Oil prices rise to 6-week high after Iran and U.S. trade blows, Saudi Aramco facilities reportedly hit.   
• The U.S. economy added jobs at a brisk pace in August, reversing a summer slowdown in hiring, while the unemployment rate held steady. Average hourly earnings rose 0.3%, in line with the consensus, while the annual increase of 3.1% was 0.1 percentage point ahead of expectations. 

• @MarioNawful

• China is getting serious about sending humanoid robots to war. The PLA is testing them for urban assaults, infiltration, patrols and other battlefield roles, with military research ramping up sharply in 2025 and 2026. One Chinese military scenario has humanoids and robot dogs clearing enemy-held buildings alongside troops, room by room. Another envisioned robots infiltrating behind enemy lines to map terrain and locate targets. China hasn’t deployed armed humanoids with operational PLA units yet, and the technology is still unreliable outside controlled settings, but researchers say that could change within 5 to 10 years. The robots went from dancing and boxing in Beijing last month to being discussed as future “combatants” just days later.

• @LauraLoomer

• China-owned Smithfield Foods controls 1,600 pig farms across 10 states, 25% of the U.S. pork market, and about 85,000 acres of American farmland. This Chinese owned pork company has been lobbying Democrats and Republicans in support of @RepAshleyHinson and Sen. @SenJoniErnst's Save Our Bacon Act, H.R. 4673. That bill would overturn voter-approved state animal-welfare laws, block similar laws in the future, and would allow China to keep owning U.S. farmland. Why are we allowing brutal and inhumane Chinese style pig confinement and Chinese ownership of US farmland under a GOP controlled Congress? Hinson and Ernst have taken campaign cash from Smithfield. So why do Republicans keep saying they will not allow China to own our farmland when they clearly have no problem with that as long as the campaign checks are big enough? (video)

• @toobaffled

• Well well well …. Pennsylvania said two people died of measles. The CDC has now put it in writing: NO deaths this year attributed to measles. No records showing measles as the underlying cause. Read that again. This is the same machine that spent years counting a car crash as COVID if the swab was positive. Comorbidities were a conspiracy theory. “Died with” was denial. They wanted the biggest number they could print. Now it is measles, the scare product, and suddenly they need a death certificate, an underlying cause, and a review. They did not get more scientific. They got more selective. When the count helps the shot, they inflate it. When the count helps the panic, they argue about the wording.

• @ImBreckWorsham

• Epstein’s own butler walked straight into an FBI sting trying to sell Epstein's FULL client list — including victims’ names. He spilled everything: the operation, the powerful people involved, the children. The FBI had the entire encounter ON TAPE for 17 years. And did NOTHING. (video)

• @dnystedt

• Rumor: Amazon AWS has stepped up procurement of AI server racks, both amount and speed, after raising its 2026 capex to US$220 billion from $200B, media report, citing unnamed supply chain sources. -Increased 3nm custom ASIC training and inference chip orders to TSMC (via AWS chip design partner Alchip). -AI server partner Wiwynn boosts rack and switch tray production -Foxconn won CPU tray orders.

• @BjornLomborg

• Good news you probably haven't heard: The Great Barrier Reef's five best years of coral cover in the 40-year record are the five most recent. After decades of predictions of its imminent demise, the reef stubbornly refuses to die.

•  @Mark_J_Perry

• NOT WIDELY REPORTED: The collapsing Federal government workforce, which fell in August to 2.67 million employees, the lowest level in more than 60 years, going back to May 1966.

Night Trading

• Asian indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 66.0 -.5 basis point.
• China Sovereign CDS 35.0 -.25 basis point.
• China Iron Ore Spot 101. USD/Metric Tonne +.6%.
• Crude Oil 92.49/bbl. +1.1%
• Gold 4,472.0 USD/t oz. -.07% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.29 -.08%. 
  
• Bloomberg Emerging Markets Currency Index 34.27 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 130.6 +.02%.
• US 10-Year Yield 4.79% unch. 
• Japan 30-Year Yield 3.98% -3.0 basis points. 
• Volatility Index(VIX) futures 18.1 -.05%. 
• Euro Stoxx 50 futures -.02%.
• S&P 500 futures -.15%.
• NASDAQ 100 futures +.29%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by transport and consumer discretionary shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% Net Long heading into the week.